Calgary’s real estate market so far this year has continued a pattern of year-over-year declines that was first set early in 2015.

According to CREB®, sales decreased by more than 10 per cent up to the end of July from the same time last year.

Yet, perhaps surprising, is the benchmark price is down just 3.7 per cent.

What’s buoying prices has less to do with demand and more to do with a decrease in supply, said CREB® chief economist Ann-Marie Lurie. New listings over the same period were down more than two per cent, including a drop of more than 10 per cent in July when compared to the same period in 2015.

“It’s really the detached listings that are driving the decline in listings.”

New listing decreases, while not matching sales declines, are helping to dampen significant price drops, said Lurie

“It’s really the detached listings that are driving the decline in listings, and that’s really what we’d expect to happen with the current market environment,” she said.

New listings for the detached sector, which makes up the largest portion of the marketplace, have fallen year-over-year by five per cent over the first seven months of 2015. In July alone, detached listings decreased by nearly
14 per cent.

Comparatively, new listings in the attached and apartment categories have increased 2.4 and 1.5 per cent, respectively, year-to-date. Lurie credits the increases to new product coming onto the market from multi-residential developments that started construction prior to the fall in oil in late 2014.

Given the current economic conditions, the numbers are to be expected, said City of Calgary economist Patrick Walters.

“What’s happening is, with the fall in prices, there is a negative effect on supply,” he said. “Falling prices act a disincentive for people to list their properties.”

In other words, anyone considering selling is more likely to delay listing because prices are flat or falling..

“Supporting that idea is the fact that the days a listing will remain on the market have gone from 40 to 46, which shows that people are having more difficulty in selling their property,” said Walters.

“When it comes to your home, it’s the last thing you’re going to let go of when facing difficulty.”

This is pushing potential sellers — even those facing financial difficulties – into a wait-and-see mode, added Lurie.

“When it comes to your home, it’s the last thing you’re going to let go of when facing difficulty,” she said.

The worst, however, could be over. In a mid-year update to CREB®’s annual Economic Outlook & Regional Housing Market Forecast, Lurie noted indicators reflect some easing of the supply pressure in the market, which should limit some of the downward pressure on prices this year.”

She later added, “last year was the biggest adjustment with a drop of about 30 per cent, and that’s in part because people were leaving.

According to the City of Calgary’s recent census released last month, more than 6,500 people left the city between April 2015 and April 2016. That’s compared with the 4,100 people Calgary lost in 2010 following the downturn a year prior.

“Oil prices have to reach a point where we don’t see job losses anymore,” said Lurie, noting, if they remain low, real estate could see a perfect storm where listings increase and demand falls even more.

Yet Walters expects Calgary’s economy will improve as oil is forecasted to recover over the next two years.

Still, improving conditions will take time to make their way into the real estate industry.

“People want to be assured conditions are improving, and because of that, there is a lag between improvement in job prospects and in the housing market,” said Walters.